Jeb Bush’s ‘Mitt Romney problem’

A former Republican governor leaves office and enters the private-equity business. He then considers a presidential campaign, drawing criticism from his party’s skeptical far-right base.

Mitt Romney? Yes, though as Joshua Green reports today, the same description applies to former Florida Gov. Jeb Bush (R), who’s reportedly weighing a national campaign in 2016.

Documents filed with the U.S. Securities and Exchange Commission on Nov. 27 list Bush as chairman and manager of a new offshore private equity fund, BH Global Aviation, which raised $61 million in September, largely from foreign investors. In November the fund incorporated in the United Kingdom and Wales a – structure, several independent finance lawyers say, that operates like a tax haven by allowing overseas investors to avoid U.S. taxes and regulations.

BH Global Aviation is one of at least three such funds Bush has launched in less than two years through his Coral Gables, Fla., company, Britton Hill Holdings. He’s also chairman of a $26 million fund, BH Logistics, established in April with backing from a Chinese conglomerate, and a $40 million fund involved in shale oil exploration, according to documents filed in June and first ­reported on by Bloomberg News.

The article added that the public won’t know who Jeb Bush’s foreign investors are because their identities are hidden behind an LLC incorporated in Delaware.

It’s worth emphasizing that Bush, like Romney, hasn’t been accused of financial wrongdoing. There’s nothing illegal or untoward about someone creating several private-equity funds and accepting millions of dollars in investments from foreigners.

But I think it’s safe to say this isn’t the ideal path for a prospective presidential candidate – as the most recent GOP candidate can attest.

John Brabender, a Republican consultant and veteran of presidential campaigns, told Bloomberg Politics, “Running as the second coming of Mitt Romney is not a credential that’s going to play anywhere, with Republicans or Democrats.”

For that matter, it’s entirely possible that these private-sector moves suggest the Florida Republican isn’t as serious about a possible campaign as many have been led to believe. After all, at this stage in the process, a would-be candidate would be expected to begin assembling a professional campaign staff, not begin cultivating a career in private equity. Green’s report added:

His flurry of ventures doesn’t suggest someone preparing to run for president, according to a dozen fund managers, lawyers, and private-placement agents who were apprised of his recent activities by Bloomberg Businessweek. Most private equity funds have a life span of 10 years. While it isn’t impossible that Bush could bail on his investors so soon after taking their money, “that would be unusual,” says Steven Kaplan, a private equity expert at the University of Chicago Booth School of Business. One fundraiser for private equity adds that normally you’d be winding down such businesses, rather than expanding them, if you were going to run.

Jeb Bush, if he were to run, already starts off in a slightly awkward position. He’s the brother of a recently failed president; he hasn’t held any public office in eight years; and he’s largely out of step with the activists that make up his party’s base, especially on hot-button issues like immigration.

Now it appears the Florida Republican will have one more handicap to consider before making a final decision.